Same Sex Marriage and Estate Planning
By Matthew T. McClintock, J.D.
Vice President, Educational Content, WealthCounsel
The Supreme Court recently refused to hear appeals from states whose same-sex marriage bans had been struck down by the U.S. Circuit Courts. As a result, same-sex marriage is now legal in several states where it had previously been banned, either by state statute or by state constitutional amendment. (There are some exceptions. Idaho, for example, has a last-minute appeal pending.)
When it comes to estate planning, what does this mean? Essentially, same-sex couples now have legal rights they previously lacked, and in some cases, they’ll need to take steps to properly leverage those rights.
Here are just a few examples:
- States that impose a state estate tax must now extend the state marital deduction to same-sex spouses.
- Same-sex married couples must now be allowed to file joint state income tax returns.
- States will have to extend survivorship rights to same-sex spouses when it comes to retirement plans, life insurance policies, financial accounts and other forms of property.
- If one spouse becomes disabled, the remaining spouse will be recognized as the disabled person’s preferred medical decision maker. Similarly, if one spouse dies without an estate plan in place, default laws of descent and distribution—that is, the rules that govern which parties make decisions and ultimately receive the deceased’s property—must now account for a same-gendered spouse. However, without an enforceable estate plan in place, the estate will often end up in the probate court. Court fights may ensue, especially in families where the surviving same-sex spouse is estranged from his or her other family members.
Proactive estate planning is essential for all couples, and same-sex spouses are no exception. For any couples who have benefited from the recent news from the Supreme Court, it’s a good idea to meet with a local estate planner to learn about new benefits and potential challenges.